The Case for Investing in Partner Operations

The Case for Investing in Partner Operations

Aaron Howerton 11 min

Partner Account Managers (PAMs) are the true partner ecosystem heroes, they are the ultimate bridge builders between partners, the program, and the functional orgs that need to support the partner.


But any straw poll of PAMs will tell you that they aren’t empowered to spend adequate time focusing on strategic engagement, including co-innovation, co-marketing, co-selling, co-retaining, and ultimately creating value with partners for joint customers. Instead, their time is consumed by three tasks.


  1. Attribution - ensuring that the partner and partner team gets credit for activities.
  2. Administration - tracking down information that the partner can’t seem to find.
  3. Alignment - asking for favors from other functional orgs to support the partnering motion.


So why do PAMs spend 50%+ of their time away from more strategic engagement?


The answer is: The absence of a partner operations function.


A quick survey we ran last week demonstrated that 40% of B2BSaaS teams do not have a dedicated headcount for partner operations. This means that most companies haven’t automated the processes needed to govern and grow partner ecosystems. See the straw poll here


To help us understand what GoToEcosystem means from a partner operations perspective and how to empower a SaaS organization with the right partner ops focus, we asked Aaron Howerton, Manager, Partner Operations Manager at 6sense to share his perspective.


Aaron has over 5 years of experience building partner operations for global SaaS companies and a total of 15 years in SaaS in other operational and leadership roles. Aaron has been kind enough to answer some big questions to help us understand how organizations can leverage partner operation best practices as part of their GoToEcosystem strategy.


Allan:

Aaron, thank you for helping us to advance the cause. I have three questions for you. First question: Why is leadership short-sighted when it comes to investing in partner operations? Leadership has seen process automation yield state-change returns in marketing and sales, why haven’t we seen commensurate investments in people+process+automation to manage partner ecosystems?


Aaron:

Shortsightedness is literally built into valuation models.


Yes, companies will carry 2-5 year goals tied to revenue, but how often does it get measured? Quarter by quarter. Ty already said it last week - “Full Stop, if a Partner Ecosystem is just beginning, it will need at least 12-18 months to bear fruit.Companies heading toward IPO with rapid growth may even be updating valuation numbers every quarter. Partnerships have a longer road to return on investment that’s sometimes belied by the ‘overnight success’ stories heard in the market. Those ‘overnight successes’ are far from it, often built on months if not years of effort. Investing in hard costs for operations or people resources can feel like throwing money down the drain.


Think about typical marketing and sales strategies. If leadership is using the same time-to-value models for partnerships it will never compare. Those gains are often seen in relatively quick bumps in key metrics - number of new leads, meetings, open opportunities, pipeline growth, forecasting, closed deals, etc. When you look at the time-to-value of partnerships, especially operations where effort will typically start with cleanup and prioritization, the ROI is harder to justify in short-term valuations because revenue gains are slower to realize.


When the ROI does show up it may start small with a few new moderately sourced deals while partners develop their own capacity or in non-revenue deals like integrations or other strategic value partners. Partnerships may walk in with a huge win in this last arena and be greeted with silence if the organization doesn’t understand the value or purpose, which leads right to the next point.


Organizations suffer from a lack of clarity and focus around Partnership goals. Partnership leaders are under tremendous pressure to justify the cost of their program (generally tied up in salaries, travel, events, and, if they are lucky, perhaps some MDF to throw around).


It’s easy to see the road to revenue when you work in and believe in partnership ecosystems but it’s common for those outside the partnership team to question the roadmap. Partnership leaders often must establish multiple roads to revenue at the same time, borrowing resources to do so, and the pressure to deliver can muddy the water on those timelines and deliveries. They know when they get started that it’s 18-24 months to return if they’re starting from the ground up and the first partnership hire is often not a season ops pro but is instead coming from the sales/relationship side of the business.


They may completely understand and agree with the need for operational support but have to stand that up on their own. Operations are then baked into the first few hires – the initial PAMs – and then leaders continue to build what they need as they go because the pressure to produce is high and the partner team gets built just like any other sales team.

Unlike the Direct side, however, the revenue is removed by one more connection—the partner—and the Partner Account Manager may have little to no contact with the customer directly.


Just like any relationship model, adding another party increases complexity and requires more finesse to ensure similar results. It’s completely natural to develop processes around what’s available – typically the existing sales stack and basic tools like word processors, spreadsheets, and presentation decks. That effort adds up over time and that’s when a lot of companies finally make the move to hire an Ops role dedicated to Partnerships. Ironically, this may often be at the 12-18 month mark of program development, which can leave your Ops hire behind the 8-ball on impact from day 1.


Allan:

Second question: What expectations and internal selling should partnership leaders be ready to deliver to justify an investment in partner operations during these lean times? If you are going to invest in headcount, why not put it all toward revenue-producing vs. revenue-supporting activities?


Aaron:

Great partner leaders know that collaboration is key. They are working against a clock, with limited resources, and need buy-in from every other org in the business. Even in the best of times, Partnerships require collaborative investment in terms of people and financial resources to reach their goals. Lean times make this collaboration even more important because the case for operational support, typically billed as a cost center, is harder to make. So how do they do it?


Understand and sell the cost of not investing. Real scalability is 100% tied to operational readiness. Failing to invest in operations, especially during the lean times, means never achieving scalable results. Scale is where partnerships start to pay back on their investment and scale simply isn’t achievable without solid, strategic operations. So the real cost is delayed /or limited ROI that can potentially capsize the program before it ever makes good on its promise. This is true, by the way, for every org in the business, not just partnerships.


Know your target metrics and track them. Partnerships have limited metrics at the outset of their effort, mostly ideas on how they can influence things like sourced deals, influence, maybe some OEM revenue, or, if channel-focused, referrals and reseller revenue goals.


The downside is that these metrics are often 18+ months out from realization, so what else can they focus on to help drive engagement? Conversion metrics apply to partnerships as well—not every partnership will be successful. Building relationships is a priority at the start of any partnership program, one must keep up with those relationships, and touch points, and treat them just like any other sales process.


Ty mentioned this last week as well and you’ll likely continue to hear people say it about literally everything - data is critical. Every program may evolve a bit differently around the opportunities they pursue and those that show up unannounced so it makes sense that key metrics will shift with each company, but if you don’t know what you’re after and aren’t keeping track, you’ll have a much harder time justifying your effort.


Pitch collaboration in terms of how Partnership efforts help others in the organization. Yes, collaboration will pull new commitments into Partnerships, but those commitments should offer value back to the people jumping in to help.

This is where a lot of companies drop the ball - their internal teams just don’t understand how Partnerships work or how they add value to their own daily efforts. Service orgs, for example, typically feel threatened by Agency partners that start taking on service work. After all, if we’re not taking the project in-house, why do we need so many service team members?

The reality is that developing strong outsourcing partners for services means setting up your internal team for higher-value projects with greater complexity, ultimately increasing the value of the internal service team while also allowing for scalable growth of new customers through agency support. All of this increases company revenue, valuation, and stability and supports long-term employment prospects at the very least and perhaps their own personal wealth if they were early enough to get an options package. All of this, of course, leads right back up to C-level support and strategy being clearly defined and dispersed within the entire organization.


Allan:

Final question: How can partnership leaders and the partner ops team set up and deliver short-term wins to justify continued and even increasing investments in partner ops?


Aaron:

This will feel a little more tactical and could work for anyone starting a new role, but given the collaborative nature of partnership operations, this approach has been very beneficial for me.


  1. Set meetings with leaders and ops teams across every functional group. Every organization has different problems. Short-term wins will likely be tied to solving key problems for stakeholders throughout the org. You don’t meet those people, you don’t know the problems, you don’t know where to start. In my experience, most people are thrilled to see a partnership ops person show up because it means they finally have a resource for problems they often don’t fully understand or have time to deal with. As you go, map the relationships so that you can easily remember who does what, where, and how you can help deliver impact.
  2. Organize issues by priority and scope. Set a roadmap for improvement and start solving problems with the most interested/engaged collaborators who will start championing your efforts to others. Pulling together a visible model for high-level project management will go a long way toward improving collaboration and getting buy-in. It doesn’t have to be full PMP-level project work – that’s often unrealistic in most organizations without a dedicated PMO – but a centralized list that others can reference will greatly improve communication.
  3. Tackle easy wins early and communicate the wins clearly, including immediate and long-term value. Make sure things are getting into company emails, Slack channels, team meetings, and wherever people are present and listening.
  4. If you’re a new partner ops hire, there are a few recurring issues you can start with any time you join a new organization. These are common issues because the effort lives with PAMs/CAMs that have their own space to manage. They are also often the core processes that will allow growth/scale and not addressing these means you need people to do the work. Look for a few of these items to start cleaning up the current ecosystem:
  5. Driving CRM enhancements specifically for partnership teams that could include custom layouts, apps, record models, reporting, and an enhanced architecture to support partner account management. CRMs aren’t built for Partnerships and what tends to get put in place are short-term solutions you’ll have to unwind and rebuild for scale.
  6. Accurate tracking for active partners and prospects within the core CR.
  7. Recruitment rhythms for inbound/outbound interest tied to the program.
  8. Distinct Opportunity rhythms for OEM, Resellers, Referral partners
  9. Consolidating reporting at program levels and developing executive summary reports that help tell the partnership story. Sourcing, Influencing, Recruitment (tie to conversion and revenue if the data’s available), OEM pipeline/forecasting, referral fees, integration status updates, etc.
  10. Catalog of existing tools/systems and potential for partnership/channel adoption.
  11. Project Management support for PAMs around post-signing activities: Onboarding, integrations, development, enablement
  12. Developing a Partnership SOP within existing documentation standards (which means figuring out how/if anyone is managing documents, pulling them together, and starting to organize things for Partnerships).


Allan:

Thank you, Aaron, for this insightful guidance. Your insight definitely gives Partner Professionals a set of calls to action on how to better align leadership with investments in partner ops, in order to drive ROI and overall business success. When we GoToEcosystem together, we win together.

Aaron Howerton 11 min

The Case for Investing in Partner Operations


Allan Adler interviews Aaron Howerton on why Partner Account Managers (PAMs) are the true partner ecosystem heroes, and why they are the ultimate bridge builders between partners, the program, and the functional orgs that need to support the partner.


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